Marks & Spencer is breaking with 125 years of tradition and will start selling branded grocery products such as Nescafe and Persil in its stores.

Some 400 of the best-known big brands will go on to shelves following the success of two small trials.

The switch came as the chain unveiled better than expected profits of £298.3million for the six months to September this morning and chief executive Sir Stuart Rose called an end to the downturn.

Promotional offers have been key to driving business, with its 'Dine
in for two for £10' proving a massive with with 4.5million meals sold
over the six months.

Break with tradition: M&S is to sell other brand products for the first time

'I think we’ve been through the worst of the downturn,' said Sir Stuart.

'We’ve seen some stability coming back in. We’ve started over the last two quarters or so to demonstrate some improved performance.

'This comes from two places: an improvement outside in terms of consumer confidence, which remains fragile, but also a lot of self-help that we have done in putting better products in, better pricing in, better innovation in, and of course tight control of costs and margins.

'The all important seven-to-eight weeks to Christmas is still to come and we have had a reasonable start to the third quarter but it was a very volatile period last year, and there will be lot of competitive activity outside.'

Marks and Spencer's shares opened up 5 per cent higher today on the back of the figures.

The move to stock other brands comes as M&S tries to be seen as a store to use for a
full weekly shop, rather than the occasional source of a few luxury
meals.

It is also seen as the prelude to the launch of an internet grocery shopping operation.

The range of branded grocery products includes Coca-Cola, Marmite, Kelloggs and Heinz. Household products will include Fairy, Pantene and Persil.

The shift in policy will heighten the rivalry between M&S and its closest competitor Waitrose, which already sells the big brands alongside its own-label foods.

Share this article

This week the store has run a series of aggressive advertisements demonstrating lower prices than Waitrose on a broad range of foods.

The big brand products will start arriving in M&S stores over the next year, starting this month with additional stores in the trial areas of the South-East and North-East.

Each M&S store will offer an edited selection of the range chosen according to its size, starting from around 50 products in smaller stores up to the full range of around 400 products in the largest outlets.

All of the branded products have been price matched to ensure they are on a par with the major supermarkets. M&S has also produced figures showing it is cheaper where it has a product that is similar to a big brand.

For example, Nescafe Original 200g is £4.44 against £3.49 for the same size of M&S Café Granules, while a box of 80 PG Tips teabags is £1.79 compared with £1.30 for the equivalent M&S Red Label bags.

M&S insisted the brands will not replace any of its existing products so as not to disappoint loyal customers.

The range will focus on brand-dominated categories where M&S would typically have a low market share such as soft drinks, confectionery, beer, laundry, personal care, and pet food.

The brands will also fill gaps where M&S has no own brand equivalent. Executive chairman, Sir Stuart Rose, said: 'Our trials have shown us that an edited selection of branded grocery and household products has a place at Marks & Spencer. Our customers are at the heart of this decision – they lead increasingly busy lives so buying those essential, must-have branded products at M&S will help save them time.

'It will be so much more for convenient for our customers to get what they need from M&S rather than having to go elsewhere.'

Executive director of food, John Dixon, said: 'My team and I are focused on delivering the best that M&S Food can offer - innovative products that provide unbeatable quality and great value.

'But there are some products that we could simply never compete with, like Marmite and KitKat, and other areas where, whilst we have a great M&S equivalent, the leading brand dominates the market.'

Today's figures reveal sales were up 2.8 per cent to £4.3billion over the half-year period, buoyed by 12 per cent growth abroad.

Revenues in the UK were 1.8 per cent higher but down 0.9 per cent when changes to store space were excluded.

Overall, it is a huge recovery from earlier this year, when the firm unveiled a massive 40 per cent drop in full-year profits sto £604.4million.

It was forced to cut its annual divident by 33 per cent because of the woeful figures in the first such move since 2000.

Executive chairman Sir Stuart Rose said: 'We are pleased with our half-year performance. We increased our share of the clothing market over the period, and our performance in food has also improved.'

General sales were up 1.7 per cent while food sales were up 1.8 per cent, although market share dipped from 3.7 per cent to 3.5.